Bowman v. Monsanto: The Price We All Pay for Roundup Ready Seeds

(Daily Finance) Last week, the Supreme Court delivered a unanimous decision that was hailed bysome as a major victory for intellectual property rights. Others worried about the implications for agriculture, the very foundation of civilization; and in the background -- not raised by the nine justices, whom a recent study called "friendlier to corporate interests" than any court since 1946 -- was the question of prices for farmers and consumers.

The case was Bowman v. Monsanto Co. (MON), in which the court held that an Indiana farmer infringed on the biotech giant's patents when he planted genetically-modified soybean seeds not purchased from the company.

The seeds had been designed to withstand application of the herbicide glyphosate, which Monsanto markets as Roundup. Farmers who plant such "Roundup Ready" crops are required to sign an agreement with Monsanto stipulating that they will buy new seeds from the company each year, rather than using the products of the plants' reproduction.

In 1999, for his main soybean crop, Vernon Hugh Bowman bought Monsanto's GM seeds, which can cost up to twice as much per acre as traditional seed. ("The difference in price is thought to reflect mainly royalties paid to Monsanto," according to The New York Times.) A late-season planting called for cheaper seeds, Bowman argued, being a riskier endeavor with respect to likely yield. So he purchased seeds normally sold for other uses, e.g. animal feed, at a grain elevator. Since, as the AP reports, "[m]ore than 90 percent of American soybean farms use Monsanto's seeds," it was highly likely that what Bowman bought would be glyphosate-resistant stock. That turned out to be the case, and Bowman planted the seeds for eight seasons.

But Monsanto is an aggressive protector of its patents: According to a 2005 report by the Center for Food Safety (CFS),

Farmers have been sued after their field was contaminated by pollen or seed from someone else's genetically engineered crop; when genetically engineered seed from a previous year's crop has sprouted, or "volunteered," in fields planted with non-genetically engineered varieties the following year; and when they never signed Monsanto's technology agreement but still planted the patented crop seed.

Monsanto says it does not "exercise its patent rights where trace amounts of our patented traits are present in farmers' fields as a result of inadvertent means."

In 2007, the company sued Bowman and won, to the tune of $84,456. Two appeals later the case reached the high court, where Bowman argued that Monsanto's patent was exhausted by the sale of its soybeans to the grain elevator;the company's lawyer countered that, if such an interpretation were upheld, there would be no commercial incentive for Monsanto to produce "what is, by now, the most popular agricultural technology in America."

The court was widely seen as completely sympathetic to Monsanto's side: "Why in the world," asked Chief Justice John Roberts, "would anybody spend any money to try to improve the seed if as soon as they sold the first one anybody could grow more and have as many of those seeds as they want?"

Justice Elena Kagan echoed Roberts's sentiment in her opinion, concluding that, if Bowman were to prevail, "The undiluted patent monopoly ... would extend not for 20 years as the Patent Act promises, but for only one transaction. And that would result in less incentive for innovation that Congress wanted." She seemed to ridicule the farmer's argument -- "we think that blame-the-bean defense tough to credit" -- and even suggested Monsanto's seeds might be "miraculous."

But the court refrained from using the occasion to issue a sweeping decision on patents. "Our holding today is limited," Kagan wrote, "addressing the situation before us, rather than every one involving a self-replicating product. We recognize that such inventions are becoming ever more prevalent, complex, and diverse. In another case, the article's self-replication might occur outside the purchaser's control. Or it might be a necessary but incidental step in using the item for another purpose."

Despite this explicit limitation, Monsanto's statement sounded triumphant, tying the protection of its patent to the efforts of entrepreneurs everywhere -- even to the survival of the species:

The court's ruling today ensures that longstanding principles of patent law apply to breakthrough 21st century technologies that are central to meeting the growing demands of our planet and its people. The ruling also provides assurance to all inventors throughout the public and private sectors that they can and should continue to invest in innovation that feeds people, improves lives, creates jobs, and allows America to keep its competitive edge.

What the company doesn't mention when touting the effects of its technology is the price paid by others for its profits (which were $1.48 billion in this latest quarter, up 22 percent from a year ago). According to the CFS, "From 1995-2011, the average cost to plant one acre of soybeans has risen 325 percent." Roundup Ready soybean seeds were introduced in 1996. The costs of planting other crops have skyrocketed as well, as consolidation in the seed business has left 53 percent of the global market in the hands of three corporations: Monsanto, DuPont (DD), and Syngenta (SYT). In that period prices shot up 516 percent for cotton, and corn seed prices rose by 259 percent. (Seventy percent of the corn and cotton grown in the U.S. is Roundup Ready, according to The New York Times.) In 2010, the spike in prices prompted an antitrust investigation of the seed industry, focused on Monsanto. That inquiry was closed last November, with no charges being brought.

Roundup itself has been linked to rising food prices, or at least the potential to drive costs up. In 2011, the journal Weed Science highlighted the growing phenomenon of glyphosate resistance, whereby overuse of Roundup creates aggressive, herbicide-immune super-weeds, which have to be deracinated or treated with even more toxic chemicals. If such plants continue to spread across farmland, labor costs could rise and yields decline, making grain more expensive.

Most fundamentally, Bowman v. Monsanto Co. confronts us with the question of whether living things should be subject to patent protection. (The Supreme Court first allowed this in 1980, when the organism in question was a bacterium engineered to break down crude oil.) Compared with its treatment of Bowman, the court was considerably more skeptical towards the idea of private companies patenting human genes, as raised by the recently-argued Assn. for Molecular Pathology v. Myriad Genetics. But though it's unsurprising that mankind's biological endowment should be treated more respectfully than that of a soybean, human life has long depended on the healthy functioning of agriculture.

As the CFS points out, the right to save seeds "has been central to farming for over 10,000 years." It's striking that the court wasn't more troubled by the privatization of what was once in large part a common store of value -- namely, the ability of nature to reproduce. "It is miserable for a farmer to be obliged to buy his Seeds," George Washington once said, providing the epigraph for the CFS's recent report "Seed Giants vs. U.S. Farmers"; "to exchange Seeds may, in some cases, be useful; but to buy them after the first year is disreputable." So much for originalism, Justice Antonin Scalia.

Moreover, Monsanto's patented seeds didn't achieve their present ubiquity through farmer choice alone: The company's expansionary policies of acquisition and licensing, as well as a shift in public university research from conventional seed breeding to biotech applications, have left many farmers unable to find high-quality non-GM seed. The implications for biodiversity should concern us -- to say nothing of the potential health effects of the widespread use Roundup -- no matter what we think of Bowman's "blame-the-bean" defense.

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